With growth in demand far outpacing increases in supply ...
How can Korea ensure energy security?


An unusually hot summer is raising fears of a repeat of last year’s country-wide blackouts. The Korea Power Exchange last week issued a number of power shortage warnings as scorching weather pushed people to crank up their air conditioners, causing reserve levels to drop below 3 million kilowatts. While Korea’s longest heat wave since 1994 has certainly stretched energy reserves, the country’s energy security challenges go much deeper than unseasonable weather. The world’s ninth-largest energy consumer, Korea imports about 97 percent of its energy sources due to a lack of fossil fuels and uranium needed to run its nuclear power plants. With the grid already stretched thin and high economic expectations for the future, Korea has to be able to rely on a stable and affordable energy supply.

Much of that responsibility falls on Korea Electric Power Company, the country’s main electricity provider. KEPCO assured The Korea Herald that it has measures in place to deal with potential shortages.

“KEPCO has strengthened information sharing with the concerned organizations and established a framework for prompt response to address power supply emergency situations,” the company said in a statement. “To be prepared for low reserve margins, we have increased demand-side management resources and their implementation. Also, we have reviewed our manuals for addressing power supply emergencies and performed various drills.”

Roots of the problem

KEPCO also plans to increase its reserve rate from the current 6-8 percent to 13-20 percent by 2014, which it says will remove the need for emergency conservation measures seen this and the previous summer.

Korea’s energy crunch has been a long time in the making. Past predictions of future energy demand have proved far from accurate. At the same time, above-expectations consumption over the last decade has not been accompanied by any significant expansion of the grid’s capacity.

“In 1999, we expected 2011 consumption to be 351 terawatt-hours but the actual consumption was 455 TWh,” said Roh Dong-seok, a senior research fellow at the Korea Economic Energy Institute. “On the other hand, in 1999 we expected the capacity of our facilities (in 2011) to be 76 gigawatts and the actual was 77 GW, only a marginal difference. The reason why the expectation was quite precise is because it is impossible to build facilities in a short amount of time. Especially something like a nuclear power plant takes about 10 years at least to build.”

With increasing capacity a long term project, encouraging a reduction in consumption remains one of the government’s few immediate options for avoiding shortages. Recently, the government duly asked businesses and households to voluntarily rein in consumption. Low electricity prices, at almost half the OECD average, are seen by many as driving over-consumption. Last year, electricity was sold at less than 88 percent of the optimal price as determined by KEPCO.

“The grand campaign the government has launched this year of saving energy can hardly achieve anything without being accompanied by an actualization (increase) in electricity prices,” said Roh.

“The only (other) way to secure the supply at the moment is to enforce strong consumption monitoring.”

In the long term, Korea simply needs a greater energy supply. One essential step toward this, according to University of Seoul international relations professor Ahn Se-hyun, is to secure resources overseas.

“From Korea’s standpoint, Russian natural gas and shale gas access on the North American continent are the most important tasks to deal with, along with African and Australian resources,” said Ahn.

The Ministry of Foreign Affairs and Trade last year allocated about $9 billion for the purpose of securing natural resources in developing countries. Such a strategy brings with it the potential for controversy. U.S. Secretary of State Hilary Clinton last summer warned against a “new colonialism” in Africa, by which rich countries strip poor countries of their resources with little regard for the wellbeing of the local inhabitants.

Regional rivals

While this is potentially a concern when it comes to Africa, Ahn says, Seoul has done a good job of avoiding a vulture-like image overseas.

“Specifically, the Republic of Korea put more emphasis on helping out local communities by using more of a local labor force and eventually creating the Seoul consensus, which is distinct from Beijing or Washington Consensus. As an example, providing medical social care services could be most tempting for the ROK considering the high quality of human resources within the ROK.

“Not only in Africa, but also in Central Asia, the ROK is using a strong network grid and historical ties and ethnic Koreans to avoid the neocolonial approach, which China (has) failed to do.”

The sentiment fostered in poorer nations is just one consideration in exploiting resources abroad. Another is how the behemoths of the region will affect Seoul’s energy strategy. Negotiating regional rivalries and security issues will be a crucial task, Ahn said.

“Russia is a very important energy partner for both Korea and Russia, especially regarding massive natural gas in the Siberian region and a transfer mechanism, possibly a pipeline scheme.

“Therefore, in the next few decades, an energy alliance among three countries, possibly four countries including North Korea, is realistic and essential. However, on the African continent, ROK and China will turn out to be strong competitors in the next few decades. Also, as far as energy aid to the North (goes), I would expect severe energy competition or conflict between ROK and China in the next several years.”

But fossil fuels are no less finite overseas, and KEPCO has committed itself to investment and research in renewable energy. Among its focuses are wind energy, photovoltaics, thermal energy and integrated gasification combined cycle, a technology used to turn carbon fuels into gas. KEPCO formed KEPCO-Uhde Inc. with German engineering company Uhde to foster this latter technology in July last year.

Questions about renewables

“Currently a feasibility study is being performed on building a photovoltaic energy station using idle land at Shin-Namwon Substation,” KEPCO said. “Most notably, KEPCO’s new head office in Naju, where it is to be relocated, will be Korea’s number one energy-conserving building as it uses various renewable energy sources such as building integrated photovoltaics and thermal energy.”

Yet, many remain skeptical of the economic viability of such renewable energy sources. Roh said that renewable energy can cost up to six times as much as nuclear energy, which currently produces more than 31 percent of the country’s energy needs. The government aims to raise that share to almost 50 percent by 2024.

“Many who support the use of renewable energy ― including civic organizations ― think if we take into account the trend of decreasing prices of renewable energy, by 2020, we can reach grid parity (the point at which renewable energy is as cheap as fossil fuels),” he said. “By and large, I agree that the cost of renewable energy will decrease but I doubt a dramatic decrease will be possible like they argue.”

KEPCO, whose subsidiary Korea Hydro & Nuclear Power Corporation handles nuclear energy operations in the country, is betting otherwise.

“Renewable energy is presently increasing mostly among advanced countries, but after 2020, when renewable energy sources are expected to reach grid parity, the renewable energy market is forecast to exponentially grow,” the company said. “KEPCO is also looking into the future in this area and is seeking to develop a specialized business model and establish a business fleet with Korean companies to enter the global market.”

By John Power (john.power@heraldcorp.com)


Readers’ voice

Energy security...

There’s wisdom in the old saying, “Don’t keep all your eggs in one basket.” Korea is following this advice and is headed in the right direction now. Since the early 2000s it has been focused on the “three Es” ― energy security, energy efficiency and environmental protection. While it can go further, Korea has quite a diversified energy basket, using gas, clean coal, oil, nuclear and renewables. The last category is the one that needs to be further developed, tapping into wind and sea power as much as possible. As well, there is definitely room for further diversification in oil supply ― the recent Iran embargo gave us an insight into how dependent Korea had become on Iranian oil. In energy research, Korea invests annually around 2 percent of its GDP, a figure unmatched by many other developed countries. Lots done, more to do.

― Brian Arundel, Seoul, via Facebook

Planned cities...

The following was sent to Voice in response to a recent feature about planned cities in Korea. The writer is design director at Balmori Associates, the principal planner of Sejong City. ― Ed.

As the designers we have been following the news surrounding the project and have participated with different consortia for the development of the newly constructed prime minister’s residence and as Balmori Associates were on the winning team for the PAT 2-2 turnkey competition.

During the competition and the subsequent zoning and design guideline phases, the Balmori team was interested in developing a new approach to landscape and cities that was rooted in landscape strategies and infrastructure. This “landscape first” idea intends to create a quality of life from which a city may organically develop. We do not think Sejong’s success should be determined on how quickly it develops.

Balmori is more interested in the factors that attract people. It is a qualitative rather than a quantitative measure of landscape urbanism that looks at a different set of metrics such as air quality, public space and energy consumption. We focus on spatial layouts, building typologies and engineering systems that together could set the stage for future cities. These determined the formal experience and direction the new city could take. Balmori’s recently completed projects in Bilbao, Spain illustrate these principles. Balmori worked on the master plan that strategically stitched green infrastructure and public landscapes within the city, transforming the industrial port into a vibrant new neighborhood. Connections are essential to avoid creating a sterile urban utopia.

The debate over the programming is important, but it does not underlie the realization of a city. Whether or not this is a science and technology hub, a business hub or a government city, the city must develop its own character. While there is a central map for its development, different consortiums are developing each of the blocks and the idea was for the central program to float above and through a grid of mixed uses. These uses were not prescribed and the guidelines must be flexible to allow further innovation to adapt to changing markets, social patterns, technology and climate patterns. Landscape urbanism does not take the grit out of the city and we recognize the character of Seoul and any world-class city is the result of layers and generations of ingenuity of its people.

― Mark Thomann, Balmori Associates, New York City

Park Jong-woo, Dokdo and the Olympics...

The ban is correct (on political demonstrations at the Olympics). The IOC can’t be expected to judge what can and can’t cause harm or hurt. A blanket ban is the only rational and fair thing to do. Infringement of the rules can then be dealt with on a case by case basis.

― Ennten Dal, Jeju City, via Facebook

No (Park Jong-woo does not deserve to miss out on an Olympic medal). If that were the case, then the black power salute at the 1968 Olympics would not have happened. For better or worse, the Olympics are an international stage. These things are bound to happen. As long as there is no harm, no inciting others to harm, why not? Our athletes are not merely their bodies. They are also their minds and their hearts. To expect less of them than that is unfair and small-minded.

― Pamila Jo Florea, Bundang, via Facebook